Lynq CEO Warns Regulation Won't Close Institutional Settlement Gap

While Washington focuses on frameworks for issuers and trading platforms, a deeper operational hurdle remains. Institutions operating across crypto and traditional markets frequently struggle to fund positions, deliver cash, and move collateral outside of standard banking hours. When firms juggle multiple venues and counterparties, the inability to move capital on demand forces them to maintain excess liquidity at every location, increasing counterparty exposure and locking up capital that could otherwise be deployed more efficiently.

The disconnect in payment infrastructure

This operational friction persists even as new regulatory proposals emerge. While the Treasury recently proposed rules for payment stablecoins, these measures do not create a unified settlement network. Federal Reserve infrastructure, such as Fedwire, still operates within defined windows, leaving a gap that tokenized cash projects—such as those involving BMO and CME Group—are only beginning to address. Until settlement systems catch up to the continuous nature of digital trading, institutions will remain tethered to the legacy constraints of traditional banking, regardless of how clear the legal landscape becomes.